Lexmark Q1 2013 Revenue Falls 11%

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Date: Tuesday April 23, 2013 07:34:52 am
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    Lexmark Q1 2013 Revenue Falls 11%

    By Scott Sloan

    Lexington-based Lexmark International announced first-quarter earnings on Tuesday that exceeded analysts’ expectations but continued to show revenue and profit declines.

    For the quarter, the company had sales of $884.3 million, down from $992.5 million in the same quarter in 2012. Analysts expected $873.6 million, according to Yahoo Finance.

    Quarterly profit was $34.8 million, or 54 cents a share. That’s down from $60.8 million, or 84 cents a share, in the first quarter of 2012.

    Excluding one-time charges, earnings per share were 88 cents, above the 87 cents per share expected by analysts. Earnings per share in the first quarter of 2012 were $1.05, excluding one-time charges.

    "In the first quarter, Lexmark delivered revenue and EPS at the high end of our guidance range, and we continued to grow our higher-value segments," CEO Paul Rooke said in a statement. Rooke will discuss earnings with analysts during an 8:30 a.m. conference call. Visit Kentucky.com after the call for updates.

    The first-quarter results continued to illustrate Lexmark’s strategic shift as it sheds its less-than-profitable inkjet offerings and adds to its highly profitable portfolio of software products.

    Compounding the shift, though, has been a slowdown in printing demand at workplaces.

    That decline comes as Lexmark continues to deal with sales declines caused by its decision to stop selling inkjet printers. The company announced in late August that it would gradually shut down its inkjet operations, which accounted for 14 percent of overall revenue in the first quarter. The revenue from those operations fell 34 percent year over year.

    A few years earlier, the company stopped producing inkjet printers aimed at home consumers because customers weren’t printing enough to meet profit expectations. Instead, the company had used the inkjet technology to complement its laser printer lines aimed at businesses.

    The move to inkjets for businesses wasn’t profitable enough, leading to the decision last year to lay off 1,700 employees worldwide over a couple of years. The bulk of those being cut, 1,100 people, are overseas workers employed in the production of inkjet cartridges. An additional 350 are full-time employees at Lexmark’s Lexington headquarters, where 200 contractors also are being cut.

    The majority of the inkjet restructuring has been completed, moving the company closer to its new look. Lexmark also struck a deal in April to sell its inkjet assets to Funai Electric Co. for $100 million.

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